What are your ideas regarding the Carrier plant deal? Bernie was all about saving the plant. Now he seems less than impressed.
@ 7 months ago
Yellow Springs, OH 45387, USA
it's indicative of how things will go the next 4 years.... liberals hating everything that Trump does, fox news loving everything.... pretty much the polar opposite of the last 8
@ 7 months ago
Villa Park, IL, USA
we'll see where things stand 4 years from now
I honestly thought he would use the govt contracts as leverage. This is just more of the same old corporate welfare we've seen for decades. If this hadn't happened in Indiana, it wouldn't have happened. Pence is leaving. He can give away farm.
@ 7 months ago
how would you have kept them from moving those jobs to Mexico?
Addison, IL, USA
First, it would be nice for companies to update their american factories. Instead they just milk them while they craft their exit strategy. But given the fact that that already happened, I wouldn't have promised that they wouldn't leave.
But since Donald made that promise, he had a few options. He could simply have asked them to postpone the decision to consider the possible legislation that would impact them. He could have made them aware that his administration would consider them
in a favorable light when the multi billion dollar defense contracts are considered for their parent company.
Those are perfectly legal and don't involve giving away the Indiana tax base.
You are right though. We'll have to wait to see if congress will even consider any of Trumps ideas. Draining the swamp would help. Unfortunately his cabinet is looking pretty waterlogged.
Carrier will be investing millions of dollars to upgrade the plant, 800 jobs are being saved (tax base and welfare recipients if their job leaves). The term corporate welfare here doesn't really apply because the tax breaks are really
an investment in the future of that local economy.
remember when Obama "saved" the auto industry? were you so critical then? I really see this as a pretty big positive
You could save all of the manufacturing in the US by simply applying that degree of " investment". That's not feasable. Though I'm sure the application process is well under way.
I was critical of the GM bailout long before Obama took office. They should have filed for bankruptcy about eight years earlier.
The manner it was ultimately handled was unfortunate. Probably necessary. There just was no money in the market at the time that would have allowed any other solution.
It's absolutely feasible if each deal results in a combination of saved jobs, prevented welfare, coverage of tax benefits from tax revenue in 5 years, and new infrastructure investment from the company (which btw provides work to other local business
So, you give an equal amount to each competitor in every industry. That would keep the govt from picking winners. Then you reduce the tax base by a large chunk for a long time. The infrastructure suffers because you emptied the coffers.
At some point you cross the line into something like corporate socialism. I don't see this as a viable business plan.
The "Green company" initiatives invested a lot more money into higher risk companies. Some failed (Solyndra), some succeeded (Tesla) but the total program is $32 billion!!
The deal was a good one for the employees and the tax payers of Indiana. The numbers are pretty clear and UTC is a healthy company
The big question is "won't corporations essentially blackmail government now in order to receive tax benefits"? Aside from the fact that corporations do this all the time when moving state to state (nothing new)
I don't see that as a very stable business plan either. I thought that was the crony capitalism that Donald was going to eliminate. Let's face it. Outsider Insider Republican Democrat...They are just on different pages of the same book.
I don't know if the numbers will prove to be all that positive for the taxpayers. The effect on the workers could very well turn negative. Their bargaining position is extremely weak. I see concessions on the horizon.
That's just pessimistic speculation. Could turn out that way, but the current numbers tell a different story.
But you know what's worse than having a bad bargaining position? Having no job.
I could tell you about a local community who used that logic to attract business. Worked great for a few years. The citizens grew tired of picking up the tab. They vote down every tax proposal on the ballot. The community is on the brink.
Ten years left on the tax abatements. It's going to get ugly.
At least from the his WP piece, Bernie seemed more against the precedent set by the terms of Carrier deal.
Like you said JC, I'm sure proposals for similar deals are making their way through legal as we speak.
@ 7 months ago
AMI... Beavercreek. It's a high end suburb that grew too fast.
Blackmail risk seems real, what's to stop a company that say *barely considered* outsourcing from whipping up a business plan and bluffing?
@ 7 months ago
Midtown, New York, NY
Contractual obligations, analysis of need, import restrictions, there could be several areas of control....
My worry is Trump basically has zero conception of what's good for long term and will decide everything on a 'is this good for my "ratings"' perspective.
What could go wrong with that approach?
@AMI - There could be several areas of control. Trump campaigned on adding another one (tariffs), but he has already reneged on that with the Carrier deal.
How much did this cost the Indiana tax payer? From what I've read, $7,000,000. For 800 jobs
@ 7 months ago
To Trump's credit though, he really is a master at manipulating the media.
The headlines have been all about Trump saving 1000 jobs. I fear that few are digging beneath the headlines.
Isn't it better to keep jobs than collect on tariffs?? The taxes collected from the workers via the standard IN rate will more than offset the corporate tax credit
The idea that every company will now has a knife to hold to the throat of the government is jumping to a conclusion. Looking at this deal in and of itself, I don't see any major downside.
1. 800 jobs saved
2. Positive cash flow for the
state over 10 years
3. Local contracts awarded for factory updates
Is it jumping to a conclusion?
Reminds me of the NFL. Build a stadium or we'll move the team.
Many stadiums were built with taxpayer money that way...(US Bank included)
It made sense, if a deal doesn't make sense we'll have to see how the administration works that out. I'd like to believe they aren't going to simply play the role of Tax Credit Santa
And many teams end up moving because the city decided the deal did not make sense
"I'd like to believe they aren't going to simply play the role of Tax Credit Santa"
Not looking good so far...
new stadiums built >>> teams that moved
And the deals never live up to the proposed financial benefit.
I'd be very surprised if all of the details of the deal have been released. Paying companies to locate, relocate, or stay is just bad governing. If nothing else it skews the the real cost of doing business. It may be a case of postponing the
I'm obviously in the minority here, maybe I'm just excited that 800 parents won't have to tell their kids that Christmas will suck this year, and likely next year as well
You're right. It's a christmas miracle.
Sure, that's one way to look at it.
Another is as an example of corporate welfare.
No, just a good thing for those families
How much did this cost? That we know of.
Each situation has to be analyzed on its own. Government assistance is very common at every level so let's not act like this is some crazy new thing that happened here.
Would creating a tariff be the answer to dissuade companies moving their production? What's the price elasticity there?
Maybe we can raise corporate taxes AND do the tariff thing.... that would be a big win for the consumer... come on
"let's not act like this is some crazy new thing that happened here."
You're right. Corporate welfare is a well-known problem.
What are we going for here?? A free market, a socialized market, or something in-between?
Are small business incentives a problem? Are woman/minority owned business incentives a problem? Where is the line that defines when corporate welfare becomes an issue?
Something something outrage about government picking winners and losers.
Most of those incentives involve a small advantage in the govt bidding process. The others are loans at favorable rates or conditions backed by govt agencies. It's pretty hard to equate those with bribing an established company to remain in country.
I don't know where you draw the line, but I'm pretty sure it's somewhere between the two.
A small advantage equates to a mandated percentage of an opportunity that must be given to woman and minority owned operations
Elmhurst, IL, USA
To be honest, I'm having trouble finding a simple breakdown of the details in total. Lots and lots of opinion though....
If I remember, JC made a bunch of stock trades immediately after the election, any regrets?
Yorkville, New York, NY
Absolutely not. I went about 50% cash. Sold more thursday. Mostly GM.
I make bad moves all the time. But this is more of a house cleaning than anything else.
Here's a strange factoid.
If, over the past forty years, you invested in the S&P 500 on the day of the mid term elections, then sold upon the pres election, you would have turned a 1000% higher return than you would by leaving your investment intact
That was the case before the great recession. I assume it's still pretty accurate. I always attributed that to the fact that the market doesn't like change. And presidents always initiate their big changes during the first two years.
You have a serious case of factoids
I think it's genetic.